Abstract: This article applied relevant theories such as institutional change, intergovernmental cooperation, and collective action, to explore whether the cross regional ecological compensation model could become an effective way to promote regional sustainable development. The "Xin'an River" ecological compensation model was taken as a study example. This study found that: （1）Under the leadership of the central government and the service of local governments to meet the requirements of modern development, the cross regional ecological compensation model should construct a horizontal and an overall compensation in a manner of sharing linkage system. This should become a long-term mechanism to promote the transition of watershed jurisdiction from "one water co protection" to "one region co prosperity". （2）The sustainable development of the cross regional ecological compensation model originated from the endogenous environmental needs of institutional arrangements. Relying solely on vertical external support would be difficult to achieve balanced governance across the entire basin.（3）The effectiveness of cross-border ecological compensation models should have basic elements such as flexible institutional supply, solid ecological governance momentum, and innovative cross regional governance patterns. The renewal and iteration of the "Xin'an River" ecological compensation model provided an effective path choice for exploring the Chinese path to modernization ecological compensation system arrangement.